Viva Energy IPO Priced at Low End of Indicative Range
July 10 2018 - 8:48PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--The initial public offering of commodity
trader Vitol Group's Australian fuel supply and marketing business
has been priced at the bottom end of the indicative range.
Depending on what stake Vitol and its partners retain in Viva
Energy Australia, the float could raise between 2.4 billion
Australian dollars (US$1.79 billion) and A$2.89 billion, making it
the biggest IPO in Australia for several years.
The offer for shares in Viva, set up by Vitol four years ago to
house gas stations and a refinery purchased from Royal Dutch Shell
PLC, closed Tuesday and the IPO price was set at A$2.50 a share. A
prospectus filed late last month had indicated the shares could be
sold at between that price and A$2.65.
The Vitol partnership has said it plans to retain 40%-50% of the
shares in Viva, although they could hold on to a bigger stake
depending on market conditions and other factors.
Viva operates the Geelong refinery in southeastern Australia,
outside Melbourne, and has a national network of more than 1,100
gas stations, most of which are Shell-branded and operate under an
alliance with the Coles supermarket chain owned by Wesfarmers Ltd.
(WES.AU). Last year, it bought Shell's aviation-fuel business in a
US$250 million deal.
The company estimates it supplies around 25% of the country's
liquid fuel needs, and is a major supplier of the bitumen that
paves roads and chemicals used in mining, paint and adhesives.
In 2016, Viva Energy moved to reduce debt with the sale and
lease back of a portfolio of gas stations, which were floated as
Viva Energy REIT (VVR.AU). Viva Energy owns a 38% interest in the
property investor, which it values at about US$440 million.
The IPO's size will rival the federal government's more than
US$4.8 billion listing of private-healthcare insurer Medibank
Private Ltd. in 2014 and create a rival for investors to Caltex
Australia Ltd., which runs the country's largest network of gas
stations and owns one of only four refineries in Australia.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
July 10, 2018 21:33 ET (01:33 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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